The gravity model and trade in intermediate inputs

Theresa M. Greaney, Kozo Kiyota

研究成果: Article査読

5 被引用数 (Scopus)

抄録

Is the gravity model as applicable to trade in intermediate inputs as it is to trade in final goods? One of the contributions of this paper is that we explicitly account for the dual nature of products that can be used as either intermediate inputs or final goods. We find that the structural gravity model performs extremely well for describing bilateral trade in final goods and in intermediate inputs. Moreover, this continues to hold even when we focus on a subset of countries in which intermediate inputs trade accounts for a growing share of trade, namely "Factory Asia." However, the gravity model may perform poorly due to model misspecification (i.e., exclusion of intranational trade) and/or sample selection, even after the model considers the dual nature of products. We demonstrate that the poor performance of the gravity model is not attributable to the large trade flow of intermediate inputs, which supports the continued use of the model as these trade flows continue to grow in importance worldwide.

本文言語English
ページ(範囲)2034-2049
ページ数16
ジャーナルWorld Economy
43
8
DOI
出版ステータスPublished - 2020 8月 1

ASJC Scopus subject areas

  • 会計
  • 財務
  • 経済学、計量経済学
  • 政治学と国際関係論

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